Protesters outside the Greek finance ministry in Athens during a visit by the troika in 2013
Among the issues plaguing deliberations over the way forward on Greece’s bailout is how the country’s international creditors can verify its economic and fiscal situation without sending monitors to Athens– which would look very much like the return of the hated “troika”.
Alexis Tsipras, the new Greek prime minister, has declared the death of the troika – which is made up of the European Commission, European Central Bank and International Monetary Fund – but for now, the troika isn’t really dead. The re-branded “institutions” must still evaluate Greece’s reform programme and give it a signoff before any of the remaining €7.2bn in bailout can be disbursed.
But the new Greek government has resisted anyone from the “institutions” showing up in Athens; they were originally supposed to show up this week, but officials said Greek authorities blocked the visit. In a letter Thursday to Jeroen Dijsselbloem, the Dutch finance minister and eurogroup president, Yanis Varoufakis, the Greek finance minister, suggested an alternative to a return of “the institutions” to Athens: have them meet in Brussels instead. Wrote Varoufakis:
As for the location of the technical meetings and fact finding and fact-exchange sessions, the Greek government’s view is that they ought to take place in Brussels.
But Dijsselbloem’s response to Varoufakis on Friday, in a letter obtained by the Brussels Blog, suggests officials from the “institutions” may be showing up in Athens after all. Wrote Dijsselbloem: Read more
Jean-Claude Trichet, right, with the parliament's economic committee chair, Sharon Bowles
The troika of bailout lenders has not been getting much love at the European Parliament’s ongoing inquiry into its activities in recent weeks. But the criticism is not just coming from MEPs in the throes of election fever. Predictions of the troika’s demise have come from some unexpected quarters, including current and former members of the European Central Bank executive board.
During the hearings, MEPs have particularly criticised the troika — made up of the International Monetary Fund, European Commission and the ECB — for its overly optimistic growth forecasts for bailout countries, which have been repeatedly revised downwards. Perhaps unsurprisingly, they have also suggested that the troika be subject to greater parliamentary oversight.
Hannes Swoboda, the Austrian social democrat who heads the centre-left caucus in the parliament, went further, saying the body is undemocratic, hostile to social rights and that the EU would be better off without it. Read more
Greek finance minister Yannis Stournaras, left, and IMF chief Lagarde at Monday's meeting.
It may be incomplete and its conclusions subject to debate, but on Monday night eurozone finance ministers got a draft copy of the much anticipated troika report on Greece. As we report online, there’s not much in it we didn’t already know – including the fact Greece will need as much as €32.6bn in new financing if the programme is extended through 2016.
But the language in the report is, as usual, pretty revealing. We’ve posted a copy of the draft here. It makes clear that eurozone creditors will be leaning on Greece pretty heavily for the foreseeable future. This, in spite of the fact the Greek parliament barely passed €13.5bn in austerity measures last week amidst serial defections form its governing coalition.
The most glaring is that Athens will have to find an additional €4bn in austerity measures for 2015 and 2016, meaning the pain isn’t done yet. But it also implies there are some more shorter-term measures that haven’t been completed yet that the troika is expecting.
Greece has revamped its reform effort and fulfilled important conditions…. These steps, which have tested the strength and cohesiveness of the coalition supporting the government, leaving also some scars therein, significantly improve the overall compliance, provided some remaining outstanding issues are solved by the authorities.